The importance of "safety-first culture" as workers' comp premiums surge

The importance of “safety-first culture” as workers’ comp premiums surge – Charles Taylor | Insurance Business America

Workers Comp

The importance of “safety-first culture” as workers’ comp premiums surge – Charles Taylor

VP of safety on why true costs are “much greater”

Workers Comp

By
Kenneth Araullo

With workers’ compensation premiums on the rise, fostering a safety-first culture in the workplace is becoming increasingly important, according to Troy Tepe, vice president of safety at Charles Taylor.

In 2022, the National Council of Compensation Insurance reported a 16% increase in net workers’ compensation underwriting premium from 2022 to 2023. This rise highlights the critical need for a safety-first culture on job sites.

To put it in perspective, Tepe cited data from the Bureau of Labor Statistics in OSHA for 2022, noting there were 5,486 workplace deaths, equating to 3.7 deaths per 100,000 full-time workers. Additionally, there were 2.8 million non-fatal workplace injuries and illnesses among private and industrial workers.

“We have employers in the United States that are paying over $1 billion per week for direct workers’ compensation alone,” he said in an interview with AM Best. “The true cost to the nation, employers, and individuals of work-related deaths and injuries is much greater than the cost of workers’ compensation insurance alone. This in itself is enough reason for a strong safety culture.”

Tepe highlighted that a strong safety culture results in fewer at-risk behaviors, lower incident rates, reduced employee turnover, decreased absenteeism, and higher productivity. He stressed that safety is culture-driven, reflecting an organization’s overall ethos.

“Over time, whether they know it or not, every organization develops a culture, positive or negative. I believe that one of the most key elements of a safety culture is recognizing within a company that all employees are accountable for safety, not just designated employees,” Tepe said.

Managers play a crucial role in creating a safe environment. Tepe believes managers need to build relationships and lead by example, knowing and setting clear expectations.

“I think that goes back to looking at every part of their job and looking at their complete job description to say what part does safety play in that and there is a part that safety plays in that, and then those managers need to understand that they need to build relationships with the employees that they are overseeing, and they need to communicate what the expectations are for safety,” he said.

Viewing safety as a component of the revenue-generating process is also important, Tepe said. For many clients in the construction industry, safety is a necessity for obtaining future work. Metrics such as dark rates, stays away, restricted transfer, and total recordable incident rates are scrutinized by contractors seeking to hire.

“If we don’t have a good safety record, then we’re not going to be able to even get on jobs to get the work. We’re not even going to be allowed to bid the work if we don’t have the right safety programs in place and our experience modification rating isn’t good and the days away restricted transfer numbers aren’t good,” he said.

New safety protocols can present challenges

Implementing new safety protocols can present challenges, as there is often resistance to change, Tepe said. Employees accustomed to existing methods may question the need for new procedures, especially if they have not experienced serious injuries.

“I believe what we have to do is, it goes back to the relationship-building and making sure that the employees have an understanding and what the requirements are. But also letting them give the feedback that they want to give. Let them participate in the safety program. You’re going to get a lot more buy-in if you get good feedback from employees and their suggestions,” Tepe said.

Misunderstandings about OSHA compliance are common. Tepe pointed out that many believe OSHA is omnipresent and primarily focused on penalizing employers. However, in 2023, Federal OSHA conducted 34,600 inspections, a relatively small number given the scope of their responsibility.

“Federal OSHA with their state partners have approximately 1,850 compliance safety and health officers /inspectors, which are responsible for the health and safety of over 130 million workers, that’s employed at more than 8 million work sites. That translates to about one compliance health and safety officer for 70,000 workers,” he said.

“Well, when you implement a strong safety culture, you’re going to eliminate the injuries that happen, you’re going to have lower absenteeism, you’re going to have the higher productivity, and most importantly, you’re going to lower those incident rates, which is what we want to do,” Tepe said.

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